Bangkok--25 Oct--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AAA' rating, with a stable outlook, to Phoenix Civic Improvement Corp., Ariz.'s series 2011 junior-lien water system revenue refunding bonds. Standard & Poor's also affirmed the rating on the corporation's junior-lien water system revenue bonds outstanding.
"The rating reflects our opinion of the water system's sufficient water supply and ample treatment capacity; as well as its affordable rates due to a low-cost supply," said Standard & Poor's credit analyst James Breeding.
Also supporting the rating is our opinion of:
- The breadth and diversity of Phoenix's ('AAA' GO rating) economy;
- The water system's strong revenue-raising flexibility, enabling the city to fund its large, but reasonable, five-year capital improvement plan (CIP); and
- Historically stable financial operations, with good coverage and high liquidity levels.
Although the city has pledged a junior lien on net water system revenues to make these payments, the junior-lien bonds will have an effective first claim on revenues as long as the city continues with its intention not to issue senior-lien debt for the foreseeable future. Proceeds from the series 2011 issuance will be used to refund the remaining series 2002 bonds.
The stable outlook reflects Standard & Poor's expectation of continued proactive management, which should result in stable, if not improving, coverage levels, coupled with consistently high liquidity levels. The revised, more modest, CIP should allow for rates to remain competitively low. The amortization schedule is structured to allow for additional bonds to be issued without coverage being negatively affected. However, should coverage levels trend downward and cash levels slip, the result could be a lower rating.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Standard & Poor's Revises Criteria For Rating Water, Sewer, And Drainage Utility Revenue Bonds, Sept. 15, 2008
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ola Fadahunsi, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
James Breeding, Dallas (1) 214-871-1407
Robert Hannay, San Francisco (1) 415-371-5038